NEW YORK (TheStreet) -- Citigroup (C) added Hershey Co. (HSY) to its "Focus List" on Tuesday, as the firm believes shares of the chocolate maker will make a strong comeback following a tough six months, during which time Hershey stock dropped 15%, CNBC.com reports.
Citigroup says Hershey is a U.S. food group top pick and is expecting Hershey to post an improvement in sales and margin trends over the course of the coming quarters, theflyonthewall.com reports.
Citigroup has a "buy" rating and $112 price target on the stock.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Watch the video below for more of Tuesday's analyst actions:
Separately, TheStreet Ratings team rates HERSHEY CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HERSHEY CO (HSY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HSY's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HERSHEY CO has improved earnings per share by 7.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HERSHEY CO increased its bottom line by earning $3.61 versus $2.89 in the prior year. This year, the market expects an improvement in earnings ($4.06 versus $3.61).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food Products industry average. The net income increased by 5.4% when compared to the same quarter one year prior, going from $159.50 million to $168.17 million.
- 48.68% is the gross profit margin for HERSHEY CO which we consider to be strong. Regardless of HSY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HSY's net profit margin of 10.65% compares favorably to the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food Products industry and the overall market, HERSHEY CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: HSY Ratings Report
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